Any electrical distributor will tell you that managing cut-to-order inventory such as wire, hose, chain and pipe can quickly become a costly and wasteful headache.
Most enterprise resource planning (ERP) systems will only display the total length of the item in stock without indicating if individual pieces have been already cut, so employees constantly have to physically go and sort through piles of materials to find the right length for a particular order. Some warehouses streamline this process by having a dedicated employee control all of the cut items to keep better track of what lengths have been cut and how much product remains. But this solution still relies on tribal knowledge and is not scalable as the warehouse grows.
A warehouse management system (WMS) can manage part or all of this process much more smoothly. In virtually all cases, I have seen this result in dramatic reduction in cut item remnants, usually as high as 80%, along with other ancillary benefits. Using a WMS, reels or coils will be set as “containers” within the system. Each cut will be tracked so that the system records the exact length of each piece of material. The system will “know” where all of the available material is, so it can direct employees to the correct source for each cut item on a pick ticket.
When the bulk item is received, the WMS will assign it a tracking number. This may post into the ERP, or it may stay within the WMS, depending on the built-in intelligence. This number will track length and sometimes other characteristics such as a manufacturer lot number, country of origin, and the kind of container. As product gets cut from the original master reel, the system will keep track of the remaining length on the spool plus the piece removed from it.
When the time comes to fulfill customer orders it is especially common to place or “group” multiple runs (lengths) of wire onto specialized parallel reels. An advanced WMS will direct the worker to cut the appropriate lengths of items from the proper source spools and ensure the correct wire runs are placed on the correct parallel reels. Left-over material can be moved to a “Remnants” bin where it will be visible through the WMS. Any employee can see exactly which lengths of which material are available at any given time.
Many WMS solutions will allow the warehouse to go paperless in some parts of its operation and keep a paper-based tracking system for cut items, and many first-time WMS users do this to ease into a full WMS deployment. In this case, the WMS will automatically generate a pick ticket for a cut item when an order comes through.
In a completely paperless warehouse, the WMS will rank and assign pick jobs to employees by priority. High priority picks such as will calls or showroom orders are typically picked first, then orders needing to shipped same day, and then future orders, and so on. This makes for more efficient cuts overall and reduces the amount of wasted material. The system will direct the employee to use remnant of other cuts whenever possible, which saves both time and money.
The process of cut item management can be a frustrating pain-point for many organizations, but with the right tools, your operations can see dramatic improvements.
Eric Allais, president and CEO of Washington-based PathGuide Technologies, Inc., has over 30 years of experience in marketing, product management and sector analysis in the automated data collection industry, including warehouse management practices in wholesale distribution. He can be contacted at firstname.lastname@example.org .